Despite a spike in Omicron infections and a slower anticipated recovery pace for the economy, Yol Phokasub, chief executive of Central Retail Corporation Plc (CRC), believes the year of the tiger symbolises strength and bravery, which will lead to an upturn for the retail industry.
"I don't know how long the Omicron variant will affect the market. We have to adapt and learn to live with it, as viruses can mutate," he said.
CRC, the country's largest retail operator, remains committed to expansion in 2022, as it has the previous two years despite the coronavirus outbreaks.
The company wants to focus on investment to strengthen its core businesses and ecosystem, said Mr Yol.
Mergers and acquisitions remain an important strategy for the firm.
STILL ACTIVE
CRC is set to spend 20-30 billion baht to expand its business this year. The budget is to open new retail stores, renovate existing stores and invest in technology.
"Technology is very important to help us to serve customers who have different demands as well as design strategies to tap into high-spending customers and those who want credit lines to shop," he said.
"With technology, our business the next three years should evolve."
According to Mr Yol, the company wants to strengthen its omni-channel presence, which now contributes up to 20% of consumer spending.
CRC believes physical stores will never die and online shopping can strengthen physical outlets, he said.
In 2021, the company invested about 17 billion baht to expand its business both domestically and abroad. This included the rebranding of Robinson at Central Festival Khon Kaen to Central Department Store and introducing Go Wow, a new do-it-yourself shop under the operation of Thai Watsadu.
Mr Yol said Thai Watsadu is a business unit under CRC that was successful last year. After a decade in the market, Thai Watsadu is now No.1 in the home improvement sector, he said.
In keeping with growing customer concern about health and wellness, CRC plans to expand Healthiful, a shop for health products, and Looks, a new beauty shop at Tops supermarket. For pet lovers, the company launched Pet 'N Me, a fashion and lifestyle shop for pets.
IMPROVING OVERSEAS
Outside Thailand, Mr Yol said CRC's business in Italy is expected to fare much better than last year.
"We are all set to continue our overseas investment," he said. "Amid the prolonged pandemic, we renovated all branches in Italy last year. The market has improved as Italian customers have returned to our stores and sales there are likely to turn around to pre-crisis levels, driven by local and European customers."
The company has been preparing employees for future expansion, said Mr Yol.
"CRC is now a multinational company. We need local and mid-multinational expertise to help us move faster," he said.
OPTIMISTIC OUTLOOK
As president of the Thai Retailers Association, Mr Yol said Thailand will remain reliant on local consumers for another year because foreign tourists are going to be sparse until the pandemic is controlled.
Nonetheless, he still feels positive Thailand's retail industry will contract less this year than in 2021. The association projects a contraction of 5-10% this year for retail, compared with a 10-20% decrease in 2021.
According to Mr Yol, two years of living with Covid-19 has allowed companies to adapt operations. Retail business should be healthier than the past two years because of mass vaccination and the public following health guidelines, he said.
"The government has learned lessons to deal with outbreaks. It needs to make fast decisions when a crisis arises," said Mr Yol.
STIMULUS NEEDED
As the retail and service sectors are relying on local consumption, the government needs to continue rolling out stimulus packages to spur consumer spending, he said.
"We would like to see a continuous stimulus package series to spur local consumption every quarter. The campaigns should cover all levels of spending power. The government should quickly end campaigns that do not work and find new, effective ones," said Mr Yol.
He said with foreign tourists still hesitant to travel to Thailand in large numbers, the government should find ways to lure those with high purchasing power, including those coming for medical tourism, those with expertise in certain areas and long-stay visitors.
"To draw these customer groups, the government has to support long-stay visitors by preparing facilities that make their stay more convenient," Mr Yol said.
He also called on the government to increase the tax deduction for individual taxpayers purchasing goods or services, saying 30,000 baht is an insignificant amount to entice people to spend.
On Dec 21, the cabinet approved fresh stimulus packages dubbed a New Year's present to stimulate spending during the festive season. The packages include a tax deduction for individual taxpayers of up to 30,000 baht when purchasing goods or services, an extension of the existing co-payment subsidy scheme, and a cut in property transfer and mortgage fees.
The tax deduction for individuals is for purchases between Jan 1 and Feb 15, applicable for the 2022 tax year.
The scheme is projected to inject 42 billion baht into the economy, forgoing roughly 6.2 billion baht worth of state tax revenue.
The scheme is estimated to help generate 0.12 percentage points of economic growth, said Mr Yol.
Books and items under the One Tambon, One Product scheme are included in the tax deduction scheme, but alcohol, cigarettes, lottery tickets, petrol, accommodation and air tickets are excluded.
He also expressed concern about the plight of small and medium-sized enterprises, urging the government to launch more measures to protect local brands and prevent foreign ones from selling products at lower prices.
"The retail world keeps changing, moving from a digital world to a virtual one. Companies who want to survive have to adapt to meet customer demand for more choice quickly, offer good products at fair prices and work to build employee loyalty," said Mr Yol.
